False Advertising

Today's regulations define three main acts that constitute false advertising: failure to disclose, flawed and insignificant research, and product disparagement. The majority of these regulations are outlined in the Lanham Act of 1946 (15 U.S.C.A. § 1051 et seq), which contains the statutes that govern TRADEMARK law in the United States.

Failure to Disclose It is considered false advertising under the Lanham Act if a representation is "untrue as a result of the failure to disclose a material fact." Therefore, false advertising can come from both misstatements and partially correct statements that are misleading because they do not disclose something the consumer should know. The Trademark Law Revision Act of 1988, which added several amendments to the Lanham Act, left creation of the line between sufficient and insufficient disclosure to the discretion of the courts.

American Home Products Corp. v. Johnson & Johnson, 654 F. Supp. 568, S.D.N.Y. 1987, is an example of how the courts use their discretion in determining when a disclosure is insufficient. In this case, Johnson and Johnson advertised a drug by comparing its side effects to those of a similar American Home Products drug, leaving out a few of its own side effects in the process. Although the Lanham Act does not require full disclosure, the court held the defendant to a higher standard and ruled the advertisement misleading because of the potential health risks it posed to consumers.

Flawed and Insignificant Research Advertisements based on flawed and insignificant research are defined under section 43(a) of the Lanham Act as "representations found to be unsupported by accepted authority or research or which are contradicted by prevailing authority or research." These advertisements are false on their face.

Alpo Pet Foods v. Ralston Purina Co., 913 F.2d 958 (D.C. Cir. 1990), shows how basing advertising claims on statistically insignificant test results provides sufficient grounds for a false advertising claim. In this case, the Ralston Purina Company claimed that its dog food was beneficial for dogs with canine hip dysplasia, demonstrating the claims with studies and tests. Alpo Pet Foods brought a claim of false advertising against Purina, saying that the test results could not support the claims made in the advertisements. Upon looking at the evidence and the way the tests were conducted by Purina, the court ruled not only that the test results were insignificant but also that the methods used to conduct the tests were inadequate and the results could therefore not support Purina's claims.

Product Disparagement Product disparagement involves discrediting a competitor's product. The 1988 amendment to the Lanham Act extends claims for false advertising to misrepresentations about another's products.